Existing Home Sales

Existing Home Sales Slip 2.7%

From CNN:

Existing home sales fell in August, snapping a four-month streak of increases, according to a report released Thursday.

Sales of previously-owned homes fell 2.7% last month from July, but were up 3.4% from a year ago, said the National Association of Realtors.

Sales had jumped 15.2% in the previous four months.

“This is an unpleasant surprise,” said Ian Shepherdson, economist at High Frequency Economics, in a research note.

The NAR report said August home sales hit a seasonally-adjusted annual rate of 5.1 million units, down from 5.24 million in July. That’s well below the analyst consensus estimate of 5.35 million annual units compiled by Briefing.com.

Looks like we’re not quite out of the woods yet.

Danger!, originally uploaded by Nostromoo.

Bank Failures, Current Events, Meltdown

Colonial BancGroup FAIL

From MarketWatch:

Colonial BancGroup Inc. became the largest bank failure this year after the Federal Deposit Insurance Corporation seized the struggling Alabama-based lender Friday and sold it to BB&T Corp.

Late Friday, the FDIC announced four other banks had been closed: Community Bank of Las Vegas and its Arizona subsidiary, Community Bank of Arizona; Union Bank, Gilbert, Ariz; and Dwelling House Savings and Loan, Pittsburgh.

The Colonial BancGroup deal will knock roughly $2.8 billion off a pool of money, known as the Deposit Insurance Fund, which the FDIC maintains to guarantee bank customer deposits.

Lost in much of the Colonial implosion is the effect this may have on independent mortgage bankers. Aside from providing the primary warehouse line to Taylor Bean and Whitaker (which crashed and burned in spectacular fashion last week), Colonial held roughly 25 percent of the warehouse lending market.

A lot of mortgage brokers will simply have no other place to go.

Failure, originally uploaded by Diana Pinto.

Bank Failures, Bankruptcy, FHA, Meltdown

Taylor Bean said to declare bankruptcy soon

From Reuters/Yahoo News:

Lawyers for Taylor, Bean & Whitaker Mortgage Corp, the 12th-largest U.S. mortgage lender, said in court papers last week that a “bankruptcy filing is imminent” for the lender after it was forced to shut down mortgage lending operations.

In court papers filed on August 6, in U.S. District Court for the Northern District of West Virginia, lawyers for Taylor Bean said that due to recent actions taken against the company by the U.S. Department of Housing and Urban Development, and mortgage financiers Freddie Mac (FRE.N) and the Government National Mortgage Association (Ginnie Mae), the company is expected to file for bankruptcy shortly.

The Federal Housing Administration said last week it had barred the Ocala, Florida-based company from making loans that the agency insures, for having failed to submit a required annual financial report and “misrepresenting” its dealings with an auditor that had discovered “irregular transactions that raised concerns of fraud.”

The lawyers, from the law firm Steptoe & Johnson, had made the statement in a request to halt a civil litigation proceeding saying that the company’s lawyers had “received word that a bankruptcy filing is imminent.”

Taylor Bean ceased mortgage lending operations on August 5.

A bankruptcy by TBW would be absolutely huge.

America declare bankruptcy - New York, originally uploaded by `© Maciej Dakowicz`.

Bank Failures, Current Events, FHA, Meltdown, News

Federal Agents Raid Taylor Bean & Whitaker

From the Wall Street Journal:

Federal agents raided the Florida offices of Colonial BancGroup Inc. and wholesale mortgage lender Taylor, Bean & Whitaker Mortgage Corp. on Monday, days after a financial deal between the two firms fell through.

The special inspector general for the $700 billion Troubled Asset Relief Program said its agents had executed search warrants at the two offices in conjunction with the Federal Bureau of Investigation and the inspector general for the Department of Housing and Urban Development. A spokeswoman for the TARP watchdog said the warrants were sealed and could provide no further details about the probe.

Colonial spokeswoman Merrie Tolbert confirmed the bank’s office in Orlando, Fla., was searched by agents, but said she didn’t know what agents were investigating. “The bank is cooperating,” Ms. Tolbert said, adding that the bank’s day-to-day operations wouldn’t be affected.

Taylor Bean promptly shut down. The mortgage lender was the third-largest issuer of FHA loans, and their closure has left a number of mortgage brokers in dire straits.

1 - 2 - 3, originally uploaded by !!! Monika !!!.

Current Events, Foreclosures, Meltdown, News

Foreclosures reach new highs

From the Wall Street Journal:

The number of U.S. properties for which a foreclosure filing was received hit its third record in five months as they jumped 32% in July from a year earlier and rose 7% from June, according to online foreclosure concern RealtyTrac.

Chief Executive James Saccacio said that despite continued federal- and state-government efforts to put together a safety net for distressed homeowners, “we’re seeing significant growth in both the initial notices of default and in the bank reposessions.”

As the wave of option-ARM mortgage resets begins to crest, once can expect that the pace of foreclosures will not abate anytime soon. Combined with job losses affecting prime mortgages, the forclosure picture continues to look bleak indeed.

Up, In The Corner, originally uploaded by e is for ericka [ELBfoto].


Case-Shiller posts record declines

From Mortgage News Daily:

A national index of home prices reported on Tuesday that the average price for a home has fallen to a level consistent with the final quarter of 2002.

The S&P/Case-Shiller Home Price Index ― which covers 20 metropolitan areas ― showed a price decline of 18.7% in March, suggesting a greater fall in prices than expected. Analysts were looking for an -18.40% reading, following the -18.67% reading for February. The 10-city measure fell a similar 18.6%.

The numbers were even worse on a quarterly basis. The Q1 report ― which covers all nine U.S. census divisions, rather than just 20 metropolitan areas ― recorded a 19.1% decline compared to the first quarter of 2008, marking the steepest fall ever in the 21-year history of the index.

“All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines,” said David Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Seventeen metro areas recorded a monthly decline in March, with Minneapolis, Detroit and New York posting record monthly declines.”

Blitzer noted that compared to the prior month, nine metropolitan areas reported a price increase.

Still, he summed up the data with a grim assessment: “Based on the March data, however, we see no evidence that that a recovery in home prices has begun.”

Grim news indeed for an industry that has been talking turnaround.

, originally uploaded by Fotologica.

Foreclosures, Meltdown, Negative Equity, News

Home foreclosure rates skyrocket


From CNN:

The foreclosure picture suddenly darkened again in February.

More than 74,000 homes were lost to bank repossessions during the month, up from 67,000 in January, according to a regular monthly report from RealtyTrac, the online marketer of foreclosed properties. Nearly 1.2 million have been lost since the foreclosure crisis hit in August 2007.

The number of foreclosure filings rose 6% during the month after falling 10% in January. Worse, filings leaped nearly 30% compared with February 2008. And the results confounded expectations: A downtrend had been expected due to the numerous foreclosure moratoriums in effect during the month.

“We were very surprised,” said RealtyTrac spokesman Rick Sharga. “The moratorium were led by big players like Fannie and Freddie and all the major banks. It was supposed to cover the whole waterfront. The fact that foreclosures still went up was a shock.”

A particularly troubling aspect of the report was that, for many borrowers, once they go into default, they never get out despite moratorium efforts. That’s borne out by comparing bank repossessions - homes actually lost by borrowers - with total foreclosure filings: Nationally, repossessions increased 11% for the month, almost double the 6% rise for filings.

The same holds true for year-over-year figures: February filings jumped 30% compared with last year but repossessions rang up a 60% gain.

The reason so many people lose their homes once they are in default is partially attributed to the severe home price drops recorded in many of the worst-hit areas. When borrowers are severely underwater, owing more than their homes are worth, it removes an incentive to keep up with mortgage payments. Some simply walk away.

I don’t know how anyone who has followed the real estate market could find this jump in foreclosures surprising. At the end of last year was the peak in subprime resets, which were most likely not as dramatic given the current LIBOR. But add to it rising unemployment, and the dramatic loss in home values, it is hardly shocking that foreclosures are on the rise - despite the actions of some lenders to hold off.


Rocket Launch of a Soulsailor, originally uploaded by _ Krystian PHOTOSynthesis (wild-thriving) _.

Existing Home Sales

Home Sales fall to 12-year low


From CNN:

Sales of existing homes fell in January to their lowest levels in nearly 12 years, with a real estate group saying buyers delayed purchases in anticipation of government programs to boost the housing market.

The National Association of Realtors said Wednesday that existing home sales dropped 5.3% last month, to a seasonally adjusted annual rate of 4.49 million units from a rate of 4.74 million in December.

January sales were the lowest since July 1997, and were far below the consensus estimate of 4.79 million units, according to a survey of economists compiled by Briefing.com.

The decline comes as some buyers forgo purchases in anticipation of government stimulus efforts aimed at boosting home ownership, according to the NAR.

“Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of housing stimulus,” said Lawrence Yun, the NAR’s chief economist, in a statement. But sales could pick up in the coming months as prices continue to fall and interest rates ease, Yun said.

Dream on, Lawrence Yun. Weren’t you predicting a turnaround in the last half of 2008?

Butt Bumping Stickman and I got busted., originally uploaded by Sarah B in SD.


Home prices collapsing


From CNN:

Home prices declined at a record pace around the nation in the final three months of 2008, according to an industry report released Tuesday.

The S&P Case-Shiller National Home Price Index reported that prices sank a record 18.2% during the last three months of 2008, compared with the same period in 2007.

Case-Shiller’s index of 20 major metropolitan areas fell 18.5%, also a record.

“The broad downturn in the residential real estate market continues,” said David Blitzer, chairman of the Index Committee at Standard & Poor’s, in a statement. “There are very few, if any, pockets of turnaround that one can see in the data.”

All 20 metro areas in the 20-city index recorded declines, with home prices falling more than 20% in eight of those cities. National home prices have dropped 26.7% since they peaked during the second quarter of 2006.

At this point, there is very little that can stop further deterioration of home prices.


run stickfigure run…., originally uploaded by badjonni.

Mortgage Lenders

Lenders shutting out mortgage brokers


From CNN:

Some big banks have cut back on doing business with mortgage brokers - and if the trend continues, many mortgage brokers could close down.

That may be bad news for consumers because fewer brokers could lead to a less competitive marketplace and more expensive home loans resulting from consumers not being able to easily comparison-shop rates.

“The banks want to get rid of mortgage professionals to reduce competition,” said Alan Rosenbaum, founder of GuardHill Financial, a New York City-based brokerage firm. “It’s not good for consumers.”

A few years ago, according to Rosenbaum, mortgage brokers were responsible for 80% of the mortgage-lending business in America. He said that’s probably under 70% now and dropping.

The actions of two big banks have helped push that percentage down.

JP Morgan Chase (JPM, Fortune 500) announced in January that it would end its so-called wholesale operations. It will no longer fund loans arranged through brokers, instead it will make loans mostly through its own offices. And Citigroup (C, Fortune 500) said it will cut back the number of mortgage brokers it works with to 1,000 from 10,000.

“Our customers are best served when a mortgage officer works directly with them, explains our products clearly and then helps them carefully evaluate the choices in light of their personal financial situation,” according to an internal Chase memo.

However, brokers say they perform a needed consumer service by monitoring offers from an array of lenders, picking and choosing the best deals. That helps keep rates low because lenders have to make their terms attractive to keep their volume flowing.

Borrowers going into a Chase branch for a mortgage loan would, on the other hand, only receive the terms available through Chase. If brokers disappeared, borrowers would have to shop all the individual banks to compare deals.

Marc Savitt, president of the National Association of Mortgage Brokers, suspects that banks like Chase may think they can increase profits by cutting out the middlemen, but the added costs of bricks-and-mortar operations will ultimately make the business less efficient. Loan officers may find themselves sitting around waiting for customers to come in rather than fielding applications from mortgage brokers.

Nice to see that CNN has finally picked up on this. It’s only been going on for two years or so.

Just Go Away, originally uploaded by MilkaWay.